Dogs of the Dow are the Cat’s Meow

December 9, 2010 Duncan Davidson

Bespoke highlights the Dogs of the Dow strategy – buying the 10 Dow stocks with the highest dividends at the start of each year. The Dogs outperformed the Dow in 2010 (so far) by 2x: 13% vs 6.6% for all 30 Dow stocks. The Dogs ran away from the other 20 Dow stocks, beating them by 4x: 13% to 3.4%.

This is one of the simplest trading strategies, with one decision a year, even simpler than Sy Harding’s seasonal pattern, with two decisions: buy in Oct/Nov when the MACD goes positive, and sell in Apr/May when it turns down.

Here are the Dogs right now, for 2011.

Seems to me a real winner would be to combine the two: buy the Dogs in Nov to get the kickoff to the seasonal strong pattern. Any reader done the analysis? Please share.

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About Duncan Davidson 228 Articles

Affiliation: NetService Ventures

Duncan is an advisor to NetService Ventures, where he focuses on digital media and the mobile Internet.

Previously he was at four start-ups: Xumii, a mobile social service based on a Social Addressbook; SkyPilot Networks, the performance leader of wireless mesh systems for last-mile access, where he was the founding CEO; Covad Communications (Amex: DVW, $9B market cap at the peak), the leading independent DSL access provider, where he was the founding Chairman; InterTrust Technologies ($9B market cap at the peak), the pioneer in digital rights management technologies, now owned by Sony and Philips, where he was SVP Business Development and the pitchman for the IPO.

Before these ventures, Duncan was a partner at Cambridge Venture Partners, an early-stage venture firm, and managing partner of Gemini McKenna, a joint venture between Regis McKenna's marketing firm and Gemini Consulting, the global management consulting arm of Cap Gemini.

He serves on the board or is an adviser to Aggregate Knowledge (content discovery), Livescribe (digital pen), AllVoices (citizen journalism), Xumii (mobile social addressbook), Verismo (Internet settop box), and Widevine (DRM for IPTV).

Visit: Duncan Davidson's Blogs

Dogs of the Dow are the Cat’s Meow

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